Oil price sheds gains as supply worries ease

By early afternoon in Europe, benchmark U.S. crude for August delivery was down 38 cents to $102.55 a barrel in electronic trading on the New York Mercantile Exchange.

By PABLO GORONDI
The Trucker News Services

7/11/2014

The price of oil edged downward again on Friday, surrendering most of the gains made the previous day, when it rose for the first time in two weeks.

By early afternoon in Europe, benchmark U.S. crude for August delivery was down 38 cents to $102.55 a barrel in electronic trading on the New York Mercantile Exchange. On Thursday, the Nymex contract closed up 64 cents at $102.93.

Brent crude, a benchmark for international oils, was 62 cents to $108.05 on the ICE Futures exchange in London.

Oil prices shot up in the last month to a 10-month high over concerns that strife in Iraq might disrupt supplies. However, they have since been easing back as al-Qaida-inspired militants' gains in Iraq did not affect oil exporters.

Also putting downward pressure on prices is the prospect of a sudden return of Libyan oil to the global market. Libyan exports have been all but cut off over the last several months because of labor and political strife that has shut ports and disrupted production. Agreements with local militias are now expected to open two ports, and a major field restarted production Tuesday.

The International Energy Agency cited only a small increase in oil production by Saudi Arabia, "prompt to respond to upward and downward shifts in global crude demand," as a sign that markets were well supplied.

"Contrary to seasonal patterns, the Kingdom barely hiked production in June, a sign that demand for its crude may not have significantly increased," the Paris-based IEA said in its monthly oil market report.

At the same time, the IEA slightly lowered its 2014 forecast of global oil demand due to weaker-than-expected economic data in the middle of the year while predicting demand would rise 1.5 percent next year, to 94.1 million barrels a day.